1.1 BACKGROUND TO THE STUDY
Farmers need productive resources and these resources are acquired with owned or borrowed fund. Agricultural is very important to the economy of must developing countries of the world and because of this, a supply of adequate finance is essential for national well-being. Since agriculture is the back-bone of Nigeria economy providing employment to about 70% of its population yet this important sector has suffered neglect since the oil boom days. Agriculture has totally declined since the early 1970s Nigeria export crops such as groundnut, oil palm and cocoa have suddenly disappeared and the country is net importer of food crops. Agriculture recorded growth rate in 1975 at about 2.6% while the population grew at about 70% compared to 57.7% in 1993. The small scale farmers according to the National Agriculture Policy Document of Nigeria (NAPDN) constitute over 90% of the food and fiber requirement of Nigeria on the other hand 1% of farmers out put in Nigeria. But tend to have greater access to farmers inputs including credit or loans.
1.2 STATEMENT OF THE PROBLEM
This study is to investigate and analyze the problems associated with obtaining credit financing agriculture production in Edo State it would be seen that many problem arise mostly are problems encountered by the farmers in the area.
The inability of the farmers to meet up with the collateral security required. By the commercial bank is a major problem hindering agriculture sector. This is as a result of farmers to deposit the collateral security before obtaining credit for agriculture development. High interest rate is another factor that discourages farmers from obtaining credit in most commercial banks, payment of interest involve when fund is borrowed. The low educational background of the farmers also constitutes hindrance in obtaining agricultural credit. The bureaucratic process involved in the process of obtaining credit or loans for agricultural purpose have not being encourage on the part of the farmers. Credit facilities are not easily accessible to small farm holders. It is not that the researcher intends to identify some of the hindering factor in order to proffer solution.